County CEO proposes $47.9 billion FY2025-26 budget, warns of $4 billion AB 218 settlement and wildfire losses

Fesia Davenport, Los Angeles County Chief Executive Officer, delivered the recommended fiscal year 2025–26 budget to the Board of Supervisors at the Board’s April 15 meeting and described “a road ahead of us [that] is difficult and paved with a series of unprecedented challenges.” The proposed budget totals $47.9 billion and, the CEO said, represents a reduction of nearly $1.3 billion from the current-year final budget figure.

Davenport emphasized the large, multi-year fiscal headwinds driving the recommendation: a tentative, countywide settlement of AB 218 claims that the CEO characterized as the costliest settlement in county history (treated in her presentation as roughly $4 billion), direct and indirect wildfire impacts totaling at least $1 billion and likely approaching $2 billion once all losses and response costs are tallied, and a significantly softer revenue outlook driven by housing-market churn and lower property‑tax growth. The presentation also noted an immediate new ongoing revenue forecast of roughly $234 million — far below departments’ combined requests and insufficient to cover more than a portion of new demands.

Planned adjustments and priorities: Davenport said the recommended budget includes a 3% curtailment requirement for most departments, elimination of 310 vacant positions and targeted savings totaling nearly $89 million in ongoing reductions. The package shows 14 net new positions overall — the result of adding 324 positions in targeted areas while removing 310 vacant positions. Departments submitted roughly $2.4 billion in new requests; the CEO deferred $815 million for later consideration and identified about $1.3 billion in unmet needs.

Davenport said the county will rely on a combination of fund balance, cuts and borrowing to address the AB 218 settlement costs and stressed uncertainty over federal and state funding flows. She noted a recent rescission notification of roughly $45 million in public‑health grant funds, warned that federal funding makes up a significant share of county resources, and said FEMA reimbursements for wildfire response can take years to materialize. The presentation also set out a number of continuing investments in the recommended budget, including Measure A homelessness allocations and investments to support upcoming large events and county governance changes under Measure G.

Supervisor response and public comment: Supervisors pressed the CEO and department leaders on the budget’s assumptions, asking for follow-up work on specific items including the county’s fire response costs and a request for a public explanation of the “curtailment” logic that eliminates funded-but-vacant positions. Supervisors also sought more granular reports on Measure A allocations and the budgetary implications of possible federal cuts to Medicaid and other programs. Supervisors emphasized preserving core safety-net programs while protecting the county’s long-term fiscal stability.

Board action: The Board took action on the recommended budget during the meeting; the recommended budget was approved by recorded vote in the meeting with supervisors recorded in favor.